Author: Site Staff

Dear Tired:



Maybe you aren’t hiring the right people in the first place. Start by examining your recruiting practices, including how managers are measured and rewarded for their recruiting effectiveness. Sadly, many organizations fail to do these things, and the results speak for themselves.

Hiring the right person is arguably a manager’s most important decision. Tie at least 25 percent of the management team’s variable compensation to the results of their recruiting efforts. Be careful, though, to target the desired results. As you are learning, people have a nasty habit of doing what they are given incentive to do.

Most banks promote the principles of relationship marketing. The more successful ones actually apply the principles. Consider applying some of the basic tenets of relationship marketing with your employees. A key strategy to maintaining a successful relationship is to continue the courtship long after the knot has been tied.

Many companies, however, discontinue recruiting at precisely the wrong time. In actuality, finding and hiring the right person is the beginning, not the conclusion, of your recruiting. Even before the ink is dry on the employment paperwork, you immediately need to launchanother phase of recruiting (sometimes called re-recruiting) to get these hard-won recruits off to a great start, turbo-charge their performance, and convince them to stick around and stay productive for the long haul.

There are a lot of meaningful and inexpensive things you can do to show new employees (and their families) that they have joined a company whose work is important and where they can belong. Provide some solid coaching during the first 12 to 18 months, with the person who hired the individual checking in every few months to see if things are proceeding as expected and promised.

More organizations are usingemployee opinion surveys than ever before to measure, track and improve employee satisfaction. Several firms incorporate survey results into their business metrics as part of a balanced-scorecard initiative. Once this is done, it becomes relatively easy to link employee satisfaction to executive pay packages. In some organizations (FedEx, for example), management bonuses don’t get paid until employee satisfaction, service quality and profitability reach certain preset levels. Trust us, this gets people’s attention.

Here are two more simple but effective retention measures.

1) Ask managers to name their three best people and then answer these questions:

• Why do these people stay with the bank?
• Why do they stay with me?

We’re betting that a meaningful conversation will ensue.

2) Ask top management to periodically visit personally with your best and brightest to let them know they are special and appreciated. This simple gesture often means more than anything you put in a pay envelope.

SOURCE: Richard Hadden and Bill Catlette, co-authors,Contented Cows Give Better Milk, www.ContentedCows.com, June 18, 2004.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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Dear Workforce Newsletter

Dear Searcher:



There is no single formula for developing key performance indicators, or KPIs for short. Seldom do two organizations have the same KPIs, since each is likely to measure the performance of its human resources department differently. Some organizations use a balanced-scorecard approach, some use Six Sigma, and some choose other methods that focus on key performance metrics.

Countless things could be measured, so focus on a small number of metrics that are strategic, can be compared to past and future data, and enable you to take quick action. Sample KPIs might include:

Human resources department cost per full-time employee (FTE)
Here you calculate the total cost of the human resources department, including salaries, divided by the number of full-time employees. It measures the cost of providing human resources services to each employee.

FTEs per human resources department FTEs
This is a measure of the ratio of human resources staff to employees, and is calculated by dividing the total number of employees by the number of human resources staff.

Quality of service
Make it an ongoing practice to measure the quality of service your human resources department delivers. Many organizations use annual surveys to gauge user satisfaction. Surveying people more regularly gives you an even better handle on service levels. Use follow-up surveys after individual human resources transactions. For example, send a brief satisfaction survey to the hiring manager and to a new employee regarding the recruiting process.

Your KPIs have to measure quality of service to provide a balanced perspective, since driving down costs is not desirable if service levels diminish as well.

Strategic KPIs
If you want human resources to be more than an administrative arm, you’ll need to track the strategic value it provides to the organization. First look at what your organization’s KPIs are and how they are influenced by the performance of the human resources department. For example, turnover can have a dramatic effect on many organization-wide metrics, such as revenue per FTE. If your human resources department helps curb turnover, then you should include it as a key performance yardstick. However you develop these principles, never lose sight of the reason behind your planning and strategy: to run your business more efficiently.

SOURCE: Scott Weston, principal, Falcon Strategic Group, San Francisco, June 22, 2004.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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Dear Workforce Newsletter

Companies can use the following self-scored checklist to determine whether they have sufficient safeguards in place to prevent workplace violence.

Pre-Employment Screening	Yes	No
1. Does your company adequately check references with attention to any details regarding the employee’s ability to get along with co-workers?
2. Does your company carefully review the employee’s application to uncover inconsistencies, significant gaps in employment and/or possible deception?
3. In the pre-employment interview, is the applicant specifically asked about his or her ability to handle conflict and any other interpersonal issue that may be job-related?
4. Does the company’s pre-employment screening include thorough criminal background checks?
Workplace Violence Policy	Yes	No
1. Does your company have a policy that clearly states the company’s commitment to the issue of aggression and violence in the workplace?
2. Does this workplace violence policy clearly describe the broad range of aggressive behaviors that are not tolerated within the work environment?
3. Does the workplace violence policy specify what is expected of both the general employees and managers not only in terms of their own behavior but what they should do if and when they encounter behaviors of concern?
4. Does the policy explicitly detail the reporting process if an employee does have concerns about a potential risk?
Employee Awareness	Yes	No
1. Do you believe that your company has effectively communicated to all employees the importance of participation in the company’s workplace violence program?
2. Do your employees understand the importance of being aware of and appropriately reporting potential warning signs?
Employee Training	Yes	No
1. Is there a training program in place that is regularly provided to the employees that focuses on the company’s workplace violence policy?
2. Is there a regular training programs for supervisors that trains supervisors in regards to their specific responsibilities under the company’s workplace violence policy?
3. Is there a regular training program for human resources, corporate security and other managers who would be involved in decision making in situations involving workplace violence?
Threat Response Planning	Yes	No
1. Does the company have a threat response team that is designated as primarily responsible for developing and maintaining the company’s threat response plan?
2. Does the company have a threat response plan that can guide critical personnel in situations involving threats of violence?
Grievance, Disciplinary and Termination	Yes	No
1. Do you believe that your company has an adequate process that addresses the grievances of employees who feel chronically mistreated?
2. Do you believe that discipline is fairly and consistently applied within the organization?
3. Do you believe that there are certain employees, because of their intimidating behavior, who are able to avoid disciplinary action?
4. Do you believe that your company gives adequate consideration when at-risk employees are terminated or encounter any kind of adverse employee action?
5. Are high-risk terminations conducted in a secure setting with attention to relevant security concerns?
6. Is the exiting strategy for terminating employees conducted with concern for security and the employee’s dignity?
Employee Assistance Programs	Yes	No
1. Does the company utilize any services that can help employees during times of stress?
2. Are the employees made adequately aware of these resources?
3. Do the employees utilize these resources or are they suspicious of their intent?
Outside Resources	Yes	No
1. Does the company consider utilizing outplacement services for terminated employees who may have difficulty finding employment?
2. Does the company have a good relationship with its local law enforcement agency?
3. Does the company have knowledge of a threat assessment professional who can aid the company when confronted by a potential threat of violence?
4. Is the company aware of its legal resources?
5. If the company does not have an internal security staff, is the company aware of a security consultant who could be called in when needed?
Training, Supervisory and Conflict Resolution Skills	Yes	No
1. Does the company train supervisors in appropriate management and conflict resolution skills?
2. Is there any kind of program available that can help employees resolve conflict and help supervisors resolve conflict among their supervisees?
Physical Security	Yes	No
1. Has there been an assessment of physical security systems?
2. Can the company communicate to the employees quickly after a critical incident in order to either warn or address their concerns?
3. Is the company comfortable with its exposure to outside risks?
4. Is there adequate control of the access points into the physical work environment?
5. If necessary, is there a way to review any threatening correspondence from customers or other outside individuals?
6. How comfortable are you with the qualifications of the security firm that the company utilizes?
Cultural and Other Issues	Yes	No
1. Do the company’s employees believe that they will be treated fairly, with respect and in a confidential manner?
2. Is it generally considered acceptable for employees to approach either human resources or the EAP for help when needed?
3. Is performance regularly reviewed in a direct, supportive and constructive manner?
4. Are the supervisors trained to recognize and deal very directly and quickly with any performance-related problems?
5. Does the company offer any educational programs regarding stress management, harassment and other issues that would promote health and safety?
6. Does the company have a plan for communicating with the media should there be a critical incident at the company?
SOURCE: Reprinted with permission from Aggression in the Workplace: Preventing and Managing High-Risk Behavior, by Marc McElhaney, published by AuthorHouse. For more information, go to www.cdresolve.com.

 

 

 

 

 

 

 

 

 

 

As part of an increasingly paternalistic approach toward employees, more companies are thinking about reducing the number of investment options in their 401(k) plans. Thirty-one percent of employers recently surveyed by Hewitt Associates said they were likely to simplify their fund selection.

Five years ago, companies were rushing to offer a greater selection of investment options in their 401(k)s to meet demands from employees who felt confident about investing on their own. Today, after three-year-plus bear market, employees are less adventurous. Employers hope that by limiting the number of options, they are making the selection process less intimidating.

“Flexibility was the buzzword of the day in the late ’90s,” says Lori Lucas, director of participant research at Hewitt Associates. “Today, participants aren’t asking for flexibility, they are asking for help.” The average number of funds in a 401(k) plan in 2003 was 14, up from 12 in 2001, according to Hewitt.

Becky Hodgin, manager of retirement services at Reynolds & Reynolds, a Kettering, Ohio-based supplier to the auto industry, is discussing dropping some underperforming funds from its 401(k) platform and has not decided if it will replace them. The company has 18 funds in its 401(k) as well as a brokerage account, up from 13 choices in 2001. It recognizes that as it has added options, it could be making the choice more difficult for employees, Hodgin says.

“I’m thinking we should make it easy,” she says. It’s hard enough to get employees to think about their retirement savings as a priority, so anything the company can do to make their decisions simpler may boost participation. More than 80 percent of Reynolds & Reynolds’ employees invest in the 401(k).

According to a recent study conducted by two Columbia Business School professors, however, the number of funds in a plan does not affect how many an employee chooses. The study, “Offering vs. Choice in 401(k) Plans: Equity Exposure and Number of Funds,” showed that whether a 401(k) plan had four or 49 funds, the median number of funds chosen by an employee ranges between three and four.

“It seems that the number of funds chosen is not connected to the number of funds offered,” says Gur Huberman, one of the authors of the report. The research did indicate, however, that for every 10 funds an employer adds to its 401(k) plan, the likeliness of participation drops between 1.5 and 2 percent.

As long as a 401(k) plan covers the major asset classes, that should be enough to satisfy employees’ needs, Lucas says. “If you have 14 funds and you are thinking about having 15, it’s likely that fund will not be a core asset class and not a suitable option for the average worker anyway,” she says.

–Jessica Marquez

The U.S. Supreme Court’s recent ruling on age discrimination opened the courthouse door a bit wider for workers over 40. But in ruling against a group of police officers from Jackson, Mississippi, the justices showed that proving a claim will require more than simply walking in.

At issue is the theory of disparate impact, which unintentionally results from a workplace policy, like compensation, that is ostensibly neutral but is in fact based on something that correlates with another factor, like age. Companies already can be held liable for disparate impact in instances where sex, religion or race are involved. With the court’s ruling, companies can now be held liable for such instances in federal court under the Age Discrimination in Employment Act.

Consultants and employment law-yers reacted calmly to the ruling, in part because it merely brings the ADEA closer to another federal law, Title VII of the Civil Rights Act, and to statutes already on the books in a number of states. Nevertheless, companies need to ensure they aren’t vulnerable to a valid claim.

“Employers will have to consider the factors when making changes in policy, being careful in their underlying reasoning” for them, says Aliza Herzberg, a labor and employment attorney with Morea & Schwartz in New York. Those factors are central to the safe harbor the Supreme Court granted companies, known as “reasonable factors other than age.”

That’s what the city of Jackson asserted when a group of its police officers sued, claiming that a new plan that granted raises to officers in lower ranks unintentionally discriminated against older officers. The “reasonable factor,” the city countered, was that it was merely attempting to compete for recruits with police departments in neighboring areas. The justices accepted that argument and dismissed the officers’ case, but they settled the larger question of disparate impact in the ADEA.

Attorneys and consultants don’t expect to see a flood of age-discrimination lawsuits, but the ruling does have practical ramifications for businesses. Companies should review their employment practices to identify any potential discrimination, says Neil Grossman, a principal with Mercer Human Resource Consulting in New York.

Before a layoff, for instance, a company should do a mock workforce reduction, which could expose an underlying discriminatory flaw. “I would typically advise a client to identify employees who are staying, and those who are going,” Grossman says. “Before implementation, analyze the results for disparate impact: What percentage of your workforce are over 40 before you went through this mock exercise, and compare it to what percentage that would be over 40 after you do that.”

A significant decrease in the percentage of workers over age 40 could be reason enough to examine the policy more thoroughly. And a plaintiff could prevail in a disparate impact suit if he shows that the company failed to adopt an alternative practice that could have had lesser harm.

—Jonathan Pont

It’s a simple list of names and addresses, but it’s something the public has never seen: exactly who makes the running shoes, basketball jerseys and other pieces of sports gear that bear the famous Nike swoosh.

In a 2004 corporate responsibility report released last month, Nike disclosed the particulars of 705 contract factories in more than 50 countries–such as China, Vietnam, Bangladesh and Mexico–that make its products. In visits to some of those factories during the past two fiscal years, representatives of the Beaverton, Oregon, company found instances of forced over- time, unsafe working conditions, sexual harassment and other violations of Nike’s vendor code of conduct, according to the report. The lapses have since been corrected, Nike says.

Nike’s disclosure marks the first time a major U.S. apparel company or retailer has revealed such detailed information about its contract manufacturers to the public, a step industry watchdogs hope competitors will follow.

Since 1999, Nike and competitors such as Adidas-Salomon, Reebok, Puma and Patagonia have shared the names of their outsourcers with the Fair Labor Association, an independent monitoring organization in Washington that audits contractors used by member companies. By disclosing the same information to the public, Nike officials hope to persuade companies that share the same factories to pool their resources to improve workplace monitoring and compliance.

“We’re a $12 billion player in an $800 billion industry, and to really effect systemic change we have to have greater collaboration on great endemic issues,” says Lee Weinstein, Nike’s corporate communications director.

Whether Nike’s action will nudge competitors to do likewise remains to be seen. An Adidas-Salomon spokeswoman says the German sportswear company is barred by confidentiality agreements from disclosing names of its contract manufacturers but is talking with unions and shareholders about options. Gap spokeswoman Kimberly Terry says the retailer considers the names of its 3,000 contract factories proprietary.

The real challenge will be getting low-cost retailers to follow suit, says Michael Posner, executive director of Human Rights First, a New York-based legal rights watchdog. “Companies like Wal-Mart have said customers are interested in one thing, and that’s low prices,” he says.

Companies like Nike say factories that concern themselves with better working conditions may come out better financially. Historically, Nike used three criteria in deciding whether to give new work to a contractor: price, speed and product quality. In 2003, the company added a fourth measure: how closely they follow Nike’s vendor code of conduct. “The companies that do well against all four we want to reward through increased orders,” Weinstein says. The companies that aren’t doing well can expect less business, he says.

—Michelle V. Rafter

Only 16 percent of global executives say their workforces will shrink over the next six months, according to a new McKinsey study.

The consulting company’s survey of 9,346 executives around the world found that 43 percent expect their workforces to stay at the size they’re at now and 37 percent expect them to increase.

McKinsey says that IT and telecom companies are optimistic, particularly those that are in India. Business-services firms, whose executives McKinsey says “are also quite confident,” will lead the way in job growth in many other parts of the world.

Some renewed hiring
In the United States, several companies that have gone through layoffs in recent years report that they are hiring.

Cessna is looking for 500 people this year to assemble business jets, according to the Wichita Business Journal in Kansas. Guidant is hiring engineers, chemists, assemblers, technicians, inspectors and analysts, mostly in California, according to the Indianapolis Star. Black & Decker is hiring 250 people, many of them machinists, in Jackson, Tennessee, according to the Jackson Sun. Some of the 250 will be former Black & Decker employees; the company has eliminated hundreds of jobs in North Carolina.

In Rocky Mount, North Carolina, which is struggling because of the decline of tobacco and textile mills, the mayor is relieved to hear that a call-center company is going to turn a former Kmart into a call center, creating about 900 local jobs, according to the Raleigh News & Observer.

The positive hiring news doesn’t mean that no one is downsizing. According to reports in several local newspapers as well as by the Vermont company AIRS, Tower Automotive is closing plants; BMC Software is scaling back in Houston and globally; and MetLife will cut several hundred jobs because of its acquisition of Travelers Life & Annuity.

Barraged by class-action lawsuits, negative press and criticism from unions, Wal-Mart is throwing its managers and human resources staff a lifeline.

In the next several months, the Bentonville, Arkansas-based retailer is planning to hire hundreds of staff to support its in-store workers, managers and human resources administrators.

Wal-Mart also is looking at how it can build technology platforms to improve communications between employees and managers and is increasing the frequency of its employee satisfaction surveys to keep tabs on potential issues and overall morale.

“People expect more”
The initiatives come on the heels of a string of class-action sex- and wage-discrimination lawsuits and increasing union organizing activity. On top of all that, in March former Wal-Mart vice chairman Thomas Coughlin resigned from the board after the company said it had found abuses of his expense account.

Susan Oliver, Wal-Mart’s senior vice president of human resources, speaking at a human resources industry conference in New York this week, says the initiative is not just a response to criticism over its employment practices. It’s indicative, she says, of Wal-Mart’s recognition that if it doesn’t improve, it will lose the war for talent, which it believes will only become more intense in coming years. “The one thing we have learned from our critics, even in those situations where we believed that they were off-base, is that Wal-Mart’s size and industry leadership means people expect more of us,” she says.

The company is currently conducting a pilot in Southern California, where it has assigned a human resources executive to each of the state’s districts, each of which contains eight to 10 stores. If successful, Wal-Mart will expand the initiative to Northern California and eventually across the country, hiring at least one human resources staff member for each of Wal-Mart’s 500 districts. Oliver says the company has more than 3,000 “personnel associates” that reside in its stores, and that “we need to supplement them on a district level.”

The district human resources support staff will help to ensure that Wal-Mart’s recruiting, selection and interviewing processes are effective and that the store’s staffing needs are met, Oliver says. The company will gauge the success of the pilot program by monitoring turnover, which currently is a little below 50 percent. “We want to impact turnover by at least 10 percent,” Oliver says.

Wal-Mart also has created a five-person team of human resources professionals with legal backgrounds who are available to answer managers’ concerns and questions regarding employment matters 24 hours a day, seven days a week from the home office. If a store manager, for example, hires a physically disabled worker and needs information on how to best accommodate that worker, the manager can call the team for assistance, Oliver says.

“Our theory is that we want our managers to never have a situation that they don’t feel like they have someone to call,” she says. “The labyrinth of regulations, law and policy is so great today that we want them to have someone that they know is their lifeline on any employment issue.” Wal-Mart is discussing how much it will expand the team to respond to the needs of its managers and has not yet made a decision.

Reducing error
On the technology front, Wal-Mart is creating a career portal to allow employees to apply for management positions in other geographic areas and be notified automatically when desired positions are available.

The company also is automating the system by which employees put in for days off to make sure that their requests are processed efficiently. The current paper-based system is not efficient and has more room for error, Oliver says.

Oliver says the budget for these projects is still being determined, but she adds that the increased focus on employee retention will provide a return on investment that will make up for the costs. To go on achieving financial success, Oliver says, “we know that we have to be not just attractive, but really attractive as an employer of choice.”

–Jessica Marquez

Dear Kid Gloves:



Managing change–particularly employees’ reactions to change–is probably the most difficult area of management. Successful approaches require a thorough understanding of the nature of the change, building a business case for change specifically geared to employees, and identifying and communicating desired behaviors to employees.

Because your success will be determined by employees’ perception of this change, the direction you take depends to a large extent on the reason for change. Generally, change will fall into one of two categories.

1) The change is driven by external factors such as a downturn or major industry shift. In this case, gaining employee support for and ownership of the change is, relatively speaking, easier because the basic message is “Our work has been good but our world has changed.”

2) The change is driven by largely internal factors such as a business underperforming relative to its competition. Getting employees to support and take ownership of the change is more difficult because the underlying message is “Our work isn’t passing muster anymore.” It is difficult to hear that your behavior is not effective, and often employees and managers react defensively, blaming others rather than acknowledging that change is needed in many aspects of the business, including perhaps their own behavior.

Differentiating between these two scenarios will guide decision-making and communication as you help employees understand the need for change and how to address it. In either situation, however, leadership must mobilize the organization by building the case for change.

While management may think the plan is watertight, employees must have the same confidence. In other words, management must promote the plan by proving its merits to employees so that everyone takes responsibility for it. While fear of losing one’s job is a powerful motivator in getting people to change how they work, it doesn’t necessarily result in the right behaviors.

Don’t assume that laying out the business case alone will result in action. Employees also need to know how to participate in it to make it work. Define the behaviors that must change. This sounds like a huge undertaking–and it is. Prioritize this process by asking (a) what roles in the organization will drive change and (b) what behaviors you need from people performing those roles.

For example, if the change involves launching a critical new product line, and your sales/marketing team is your frontline change agent, focus on their behaviors first. You cannot boil the ocean, so start with the most critical roles and then expand the change process throughout the organization.

SOURCE: Carol Henriques,Capital H Group, Chicago, June 8, 2004.

LEARN MORE:Incentives and the Art of Changing Behavior.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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Dear Workforce Newsletter

Well-publicized bills in Massachusetts and Maryland that would force employers to pay part of the cost of coverage for the uninsured are just the tip of the iceberg.

The HR Policy Association, a lobbying group for senior human resources executives, says that bills are pending in 30 states that would require employers to foot at least part of the cost of health-care coverage.

Getting the most attention is a Maryland proposal that has passed the state senate and is expected to become law. It would require large employers to spend at least 8 percent of their payroll on health insurance benefits, or contribute to the state’s health insurance fund for low-income residents. It applies to employers with at least 10,000 employees in Maryland. Wal-Mart employs 15,000 in the state.

According to the Washington Post, Wal-Mart said a year ago that it spent about 5 percent of its payroll on health benefits. Wal-Mart now tells the Post that it spends 7 percent to 8 percent.

Another bill, in Massachusetts, would charge employers who do not provide health benefits the amount that the state is paying to insure the company’s employees, according to Business Insurance.

Variety of possible rules
The HR Policy Association divides the state health insurance proposals into three categories:

Mandates: Like the Massachusetts and Maryland legislation, these would require employers to pay for health care coverage, either directly or indirectly. In some locales, politicians want employers that don’t provide health benefits to pay higher wages to employees. In Nevada, for example, Democratic Assemblywoman Christina Giunchigliani wants to mandate a $6.15 minimum wage for employers who don’t provide health benefits and $5.15 for employers who do provide benefits.

Contract conditions: New Jersey, Texas, Washington and other states are considering bills that would provide preferences to employers that provide health care when the states award government contracts and tax breaks. In Mississippi, for example, Democratic Rep. Percy Watson wants to require employers who would benefit from a state loan program to provide health insurance to their employees within 180 days of receiving the loan.

Reporting: These bills, introduced in some form in at least 20 states, require that a public report be issued showing how many of a company’s employees are receiving Medicaid or similar assistance. These proposals are aimed more at shaming employers than in sticking them with a financial mandate, the HR Policy Association claims.

Marisa Milton, associate general counsel and director, government relations for the HR Policy Association, says employers are fighting these initiatives using in-house lobbying teams as well as state lobbying groups, such as state chambers of commerce. “Employers are very wary of any mandates,” Milton says. Legislation is being proposed frequently, and the association is fielding numerous requests from employers trying to keep up with what’s happening in so many different legislatures. “It is so fragmented,” she says. “There are so many moving pieces.”

U.S. Rep. Chris Van Hollen (D-Maryland) may introduce a bill that would mandate a federal health-spending requirement on businesses, much as Maryland is doing on the local level. With Republicans controlling the presidency and both house of Congress, passage of such a federal law is unlikely.